On August 8, 2024, Walker & Dunlop Inc (WD, Financial) released its 8-K filing for the second quarter of 2024. Walker & Dunlop Inc is a United States-based commercial real estate finance company, primarily engaged in originating, selling, and servicing multifamily and other commercial real estate financing products under the programs of Freddie Mac, Fannie Mae, Ginnie Mae, and the Federal Housing Administration.
Performance Overview
Walker & Dunlop Inc (WD, Financial) reported total revenues of $270.7 million for Q2 2024, a slight decrease of 1% year-over-year. The net income for the quarter was $22.7 million, or $0.67 per diluted share, both down 18% year-over-year. Adjusted EBITDA increased by 15% to $80.9 million, reflecting the strength of the company’s recurring revenue streams and recovery in transaction volumes. Adjusted core EPS rose 26% year-over-year to $1.23.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | Variance | % Variance |
|---|---|---|---|---|
| Total Revenues | $270.7 million | $273.4 million | -$2.7 million | -1% |
| Net Income | $22.7 million | $27.6 million | -$4.9 million | -18% |
| Diluted EPS | $0.67 | $0.82 | -$0.15 | -18% |
| Adjusted EBITDA | $80.9 million | $70.5 million | $10.4 million | 15% |
| Adjusted Core EPS | $1.23 | $0.98 | $0.25 | 26% |
Transaction Volumes and Managed Portfolio
The company reported a total transaction volume of $8.4 billion, consistent with the same quarter last year. The managed portfolio grew by 5% year-over-year to $150.3 billion, driven by increases in Fannie Mae and Freddie Mac portfolios.
Segment Performance
In the Capital Markets segment, total revenues decreased by 6% to $118.2 million, primarily due to a 21% decline in MSR income. The Servicing & Asset Management segment saw a 4% increase in total revenues to $148.2 million, driven by higher servicing fees and placement fees.
Commentary
"The second quarter of 2024 was the first quarter in almost two years with consistent rates and the ability for commercial real estate owners to transact, pushing Walker & Dunlop's total transaction volume up 32% from Q1'24 to $8.4 billion," commented Walker & Dunlop Chairman and CEO Willy Walker.
Dividend and Share Repurchase
The Board of Directors declared a dividend of $0.65 per share for the third quarter of 2024. Additionally, the company has authorized the repurchase of up to $75.0 million of its outstanding common stock over a 12-month period ending February 23, 2025.
Analysis
Walker & Dunlop Inc (WD, Financial) faced challenges in maintaining its revenue levels, but the increase in adjusted EBITDA and adjusted core EPS indicates strong underlying business fundamentals. The company's ability to grow its managed portfolio and maintain transaction volumes despite market fluctuations is a positive sign for future performance.
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Explore the complete 8-K earnings release (here) from Walker & Dunlop Inc for further details.
